MIL Restrictions for Payday Lenders.

Discussion in 'On Topic' started by Sharkticon, Jul 26, 2007.

  1. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    City panel proposes protections in response to concerns by Marines By Lola Sherman -

    July 26, 2007
    OCEANSIDE - In January, Maj. Gen Mike Lehnert, commanding general for Marine Corps installations west of the Mississippi, asked the Oceanside City Council to do something about payday lenders who charge high interest rates to members of the military.

    It's an issue that affects military personnel across the nation. Nearly 200 payday lenders operate in the county, which is home to more than 113,000 active-duty members of the military serving at 14 bases and commands.

    With payday lenders nationwide charging as much as 400 percent interest, Congress passed a law, effective Oct. 1, limiting interest rates that can be charged to military personnel to 36 percent annually.

    Additionally, a regional Military Joint Task Force on Financial Health has been set up by Navy and Marine officials to address service members'
    financial issues. "Financial health is a priority regarding our sailors and Marines," task force spokesman Brian O'Rourke said in an e-mail yesterday. "We consider financial health to be just as important as physical health or mental health. It's also a combat-readiness issue for us."

    The city of San Diego has 85 payday lenders, the most in the county.
    Oceanside is second with 22, according to the California Department of Corporations, which licenses the businesses.

    Lehnert said he approached the Oceanside council for help because the city is home to so many payday lenders, which Camp Pendleton Marines use for short-term loans until their next paycheck.

    On Monday, the city made its first response.

    The Planning Commission voted to recommend that the City Council pass an ordinance requiring lenders to get a special operating permit. The commission recommended that such companies not be allowed within 1,000 feet of a similar business or 500 feet of a home, church, park or school.

    Similar regulations
    The law is similar to regulations for massage parlors and pool halls.

    Although San Diego has the most payday lenders in the county, it has no plans for regulations, city spokesman Kevin Klein said. Chula Vista has considered regulations, but its Planning Commission has not made any decisions, assistant city planner Joe Hare said. Lehnert said Marines can't focus on their duties if they are worried about debts.

    "I definitely want to thank the Oceanside City Council and Planning Commission for their actions and their support of our military and their families," he said in an interview yesterday. "We are not targeting any particular lending industry. If the lending institutions keep their interest rates below those generous levels (provided in the new federal
    law) and do not engage in other prohibited practices that negatively affect the readiness of our Marines and sailors, we don't have an issue."

    Payday lenders have said that the federal law sets an interest rate that won't pay their overhead and that regulating annual rates doesn't make sense because loans are typically for just a few weeks.

    Payday-lending businesses, also called payday advance or deferred deposit providers, typically give loans in the range of $100 to $500, charging $45 on a $300 loan, said Stephen Altobelli, spokesman for the Coalition for Financial Choice.

    The Washington, D.C.-based coalition includes members of the short-term lending industry.

    Generally, Altobelli said, the borrower writes a check to cover the $345 total, which the lender promises not to cash until payday, perhaps two weeks away.

    400% annually
    Critics note that interest is nearly 400 percent annually. If the loan is paid off immediately, the $45 amounts to a 15 percent charge. Altobelli said it's not fair to calculate an annual interest rate because no one considers annual rates on one-time charges, like for ATM use or returned checks.

    Critics counter that those charges are flat fees, and that interest rates such as those levied on credit cards and other loans are calculated annually. And payday loans can be extended, putting low-income earners, including service personnel, further into debt.

    Payday lending proliferated nationally in the 1990s, burgeoning from 300 establishments in 1992 to more than 10,000 in 2001, Altobelli said.
    He said part of the reason for the loans' newfound popularity is that "it's an instant-gratification society."

    But the loans are meant for emergencies, like car repairs, "and not to go to the mall," Altobelli said.

    Teaching responsibility
    O'Rourke agreed that part of the military's education process is to overcome an 18-or 19-year-old's natural desire for fancy wheels on his Honda Civic.
    The Navy, O'Rourke said, is trying to teach its young personnel to budget and to invest money.

    Payday lending is a $45 billion-a-year business, according to the Coalition for Financial Choice.

    Industry estimates indicate that 19 million households borrowed money last year, said Lyndsey Medsker, spokeswoman for Community Financial Services
     
  2. TRN

    TRN Well-Known Member

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    Its sad how many become stuck in it.
     
  3. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    Yes, I know. I'm a financial counselor and see people get themselves in deep with payday lenders.
     
  4. Maffy29

    Maffy29 Active Member

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    I went to a car dealer around Ft Carson, CO and they wanted more for a down payment than I had. They recommended I use one of these payday lenders to come up with the rest. Good thing I didn't buy from them.
     
  5. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    Financing E1 and up!!!
     
  6. NPH

    NPH Guest

    :rofl: I saw an ad like that once. :uh:
     
  7. Jyokker

    Jyokker The trouser snake is very aggressive. It will corn

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    HOLMES MOTORS! E-1 and up!
     
  8. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    Charlie Faulk for those in Norfolk, VA. :)
     

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